Listed companies in the G20 region need to
improve on meeting current integrated reporting good practice
standards, according to the research commissioned by the
International Integrated Reporting Committee (IIRC).
The IIRC research, examining 101 annual
reports in the G20, found just under half (42%) of the listed
company annual reports surveyed adhere to integrated reporting good
practice standards.
The US is lagging behind most, with only19% of
integrated reporting criteria being fulfilled with only 17% of
reports presenting a link between the company’s sustainability
strategy and group strategy.
The IIRC’s researchers, Black Sun, found that
in the US, “due to the compliance driven approach to reporting, it
is difficult for the companies to produce a ‘holistic’ view of the
company and provide any detailed non-financial information.”
The study also found disappointing results in
China and India, with only 36% of reports in China and 33% in India
fulfilling integrated reporting criteria.
The report said that some of the companies in
the India sample group have a US listing and are therefore more
financially focused and adopt a more ‘rules’ based reporting
regime, “with compliance firmly in mind rather than
communication”.
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By GlobalDataIn China most reports are said to be almost
entirely financially focused and lack any insight into the market
or their operations.
However, the study has found some encouraging
results in countries like Brazil and South Korea where compliance
is increasing.
According to the research the most compliant
country in terms of sustainability reporting is South Africa where
73% of reports were meeting the integrated reporting criteria.
The high level of compliance in South Africa
is linked to the King’s Code of Governance, which requires
companies listed on the Johannesburg Stock Exchange to produce one
integrated report instead of an annual financial report and
separate sustainability report.
The G20 includes South Africa, Canada, Mexico,
US, Argentina, Brazil. China, Japan, South Korea, India, Indonesia,
Saudi Arabia, Russia, Turkey, European Union, France, Germany,
Italy, UK and Australia.
